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Is ViaSat, Inc. (VSAT) A Good Stock To Buy?

Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

ViaSat, Inc. (NASDAQ:VSAT) was in 18 hedge funds’ portfolios at the end of the third quarter of 2018. VSAT has seen an increase in enthusiasm from smart money in recent months. There were 16 hedge funds in our database with VSAT holdings at the end of the previous quarter. Our calculations also showed that vsat isn’t among the 30 most popular stocks among hedge funds.

If you’d ask most traders, hedge funds are seen as slow, old financial tools of yesteryear. While there are over 8,000 funds in operation today, We choose to focus on the crème de la crème of this club, around 700 funds. These hedge fund managers preside over bulk of the hedge fund industry’s total capital, and by shadowing their finest stock picks, Insider Monkey has formulated a few investment strategies that have historically surpassed the broader indices. Insider Monkey’s flagship hedge fund strategy defeated the S&P 500 index by 6 percentage points annually since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.

BAUPOST GROUP Seth Klarman

Let’s take a look at the latest hedge fund action surrounding ViaSat, Inc. (NASDAQ:VSAT).

What does the smart money think about ViaSat, Inc. (NASDAQ:VSAT)?

Heading into the fourth quarter of 2018, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in VSAT over the last 13 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

No of Hedge Funds with VSAT Positions

The largest stake in ViaSat, Inc. (NASDAQ:VSAT) was held by Baupost Group, which reported holding $878.2 million worth of stock at the end of September. It was followed by FPR Partners with a $387.3 million position. Other investors bullish on the company included Southeastern Asset Management, Odey Asset Management Group, and Cove Street Capital.

As one would reasonably expect, key hedge funds have jumped into ViaSat, Inc. (NASDAQ:VSAT) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the most outsized position in ViaSat, Inc. (NASDAQ:VSAT). Balyasny Asset Management had $8.4 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $1.6 million position during the quarter.

Let’s check out hedge fund activity in other stocks similar to ViaSat, Inc. (NASDAQ:VSAT). We will take a look at Weingarten Realty Investors (NYSE:WRI), Boyd Gaming Corporation (NYSE:BYD), Lumentum Holdings Inc (NASDAQ:LITE), and AMC Networks Inc (NASDAQ:AMCX). All of these stocks’ market caps match VSAT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WRI 11 55663 0
BYD 33 759409 6
LITE 33 197140 -3
AMCX 21 314255 2
Average 24.5 331617 1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.5 hedge funds with bullish positions and the average amount invested in these stocks was $332 million. That figure was $2.03 billion in VSAT’s case. Boyd Gaming Corporation (NYSE:BYD) is the most popular stock in this table. On the other hand Weingarten Realty Investors (NYSE:WRI) is the least popular one with only 11 bullish hedge fund positions. ViaSat, Inc. (NASDAQ:VSAT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BYD might be a better candidate to consider a long position.

Disclosure: None. This article was originally published at Insider Monkey.

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